Fiscal Implications of the Global Economic and Financial Crisis

September 18, 2009

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Fiscal Implications of the Global Economic and Financial Crisis, (USA: International Monetary Fund, 2009) accessed November 21, 2024

Summary

The economic and financial crisis is affecting the fiscal accounts of virtually every country. Public sector support for the financial system, fiscal stimulus and the automatic stabilizers, as well as the revenue decline from the downturn in commodity and asset prices, are leading to sharp increases in deficits and debt stocks around the world. Expansionary fiscal policy continues to be necessary in the short term to stimulate economic recovery. But it is now essential that governments reassess the state of their public finances in light of the global crisis and adopt strategies that will ensure medium- and long-term fiscal sustainability. Many of the advanced economies most affected by the crisis are also those where age-related spending will increase markedly in the coming years, adding particular urgency to the need to identify medium-term consolidation strategies. This new paper, which focuses mainly on advanced and emerging market economies, employs projections based on the April 2009 World Economic Outlook to quantify the fiscal implications of the crisis for a cross-section of countries. The authors assess the post-shock fiscal balances and debt outlook, and suggest ways for governments to clarify their strategies for maintaining fiscal solvency.

Subject: Expenditure, Financial sector policy and analysis, Fiscal policy, Fiscal stance, Labor, Pension spending, Pensions, Public debt, Solvency

Keywords: Africa, Asia and Pacific, Asset, Cost, Debt ratio, Eastern Europe, Emerging market G-20 country, Europe, Fiscal stance, GDP, Global, Mutual fund assets, North America, OP, Pension spending, Pensions, PPP GDP weight, PPP GDP-weighted averages, Revenue loss, Solvency

Publication Details

Pages:

85
Volume:

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DOI:

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Issue:

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Series:

Occasional Paper No. 2009/002
Stock No:

S269EA
ISBN:

9781589068506
ISSN:

0251-6365

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